Leasehold vs. Freehold: Key Differences Explained

Freehold and leasehold describe different forms of property ownership. With freehold, you normally own the property and the land it stands on indefinitely.

With leasehold, you own the right to occupy the property for a fixed term under a lease, while the freeholder retains the underlying interest.

The government estimates there are around five million existing leasehold properties in England and Wales. Most flats are leasehold, although some houses are too.

Our guides to leasehold and freehold conveyancing and freehold and leasehold ownership in the UK explain the practical differences.

Leasehold and freehold compared

Issue	Freehold	Leasehold
Ownership	Property and land indefinitely	Right to occupy for a fixed term
Ground rent	Normally none	May apply to older leases
Service/estate charges	Estate charges can apply on some developments	Service charges commonly apply
Alterations	Subject to planning, covenants and other restrictions	Lease may also require landlord consent
Repairs	Owner usually responsible	Responsibilities divided by the lease
Length of ownership	Unlimited	Lease term reduces over time
Common property type	Houses	Flats and some houses

Freehold ownership is not necessarily free from restrictions. Modern estates can include estate management charges and restrictive covenants. See our guide to restrictive covenants and the legal aspects of buying a new build home.

Costs that leaseholders should check

Service charges can cover maintenance, insurance and communal areas. Leaseholders have statutory rights to request information about how service charges are calculated and spent.

Ground rent depends on the lease. Most qualifying residential leases granted from 30 June 2022 are restricted to a peppercorn ground rent, effectively zero. Existing older leases can still require payment.

Our guide to the hidden costs of leasehold ownership explains what buyers should review before exchange.

Why the 80-year point matters

Under the current statutory lease-extension regime, marriage value can become payable when a flat lease has 80 years or less remaining. That can significantly increase the premium for extending the lease.

Mortgage lenders also have their own minimum lease-length criteria, so there is no universal rule that lending stops below 70 years. Buyers should check the specific lender's requirements. Our guide to lease extensions during conveyancing explains the process.

What leasehold reforms are already in force?

The Leasehold and Freehold Reform Act 2024 became law in May 2024, but many headline reforms still require commencement regulations.

Reform	Position in August 2026
Two-year ownership requirement before statutory extension	Removed from 31 January 2025
Higher 50% non-residential threshold for Right to Manage	In force
990-year statutory lease extensions	Not yet in force
Abolition of marriage value	Not yet in force
Wider service-charge reforms	Not fully commenced
£250 cap on older ground rents	Proposed in draft legislation
Commonhold as default for most new flats	Proposed

The government is currently consulting on valuation rates needed to implement parts of the 2024 Act. That consultation opened on 15 July 2026.

A separate draft Commonhold and Leasehold Reform Bill proposes a £250 annual cap on many existing ground rents, falling to a peppercorn after 40 years, and a move towards commonhold for most new flats. The government indicates the ground-rent cap could take effect in late 2028, subject to Parliament.

Read our overview of the impact of new property laws on conveyancing and current guidance from LEASE.

What should buyers check?

For a leasehold purchase, review the lease term, ground-rent clause, service-charge history, planned major works and restrictions on alterations, pets or subletting. Your solicitor should also review title searches, searches in the conveyancing process and mortgage offers and their role in conveyancing.

Shared ownership is normally leasehold and has separate considerations; see conveyancing for shared ownership.

Frequently asked questions

Can I buy the freehold of my flat?

Potentially, through collective enfranchisement where the qualifying requirements are satisfied. Individual flat owners can usually pursue a statutory lease extension instead.

Is marriage value still payable?

Yes, under the current law for qualifying statutory extensions where the lease has 80 years or less remaining. Its abolition under the 2024 Act has not yet commenced.

Is leasehold being abolished?

No. Existing leasehold properties will remain. The government proposes making commonhold the default tenure for most new flats.

Should I wait for the leasehold reforms before extending?

That depends on the lease length, your plans to sell or remortgage, and the likely extension cost. Waiting can be risky if the lease is approaching 80 years.

Before committing to a purchase, review common pitfalls in property transactions and the official GOV.UK leasehold pages.

Athi Law's conveyancing solicitors can review the lease, title and management information before exchange. You can also send us the lease for advice.